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Downsizing Blog

We’re ten years past 9/11, and over the last decade we’ve shed a number of our liberties and spent wildly to counter a terrorist threat that, as the recent model airplane plot demonstrated, isn’t existential. The bureaucratic legacy of 9/11, the Department of Homeland Security, has proven an unwieldy and pork-laden nightmare. It’s time to abolish it.

Today the POTUS — in this case, Principal of the United States — will give his third annual, national back-to-school speech, to be televised live by MSNBC. The immediate target, of course, is the kids, but I doubt it would be viewed negatively by the President if lots of adults saw or heard the speech and thought, “Wow, this guy really cares about kids. I really like him.” And who knows, maybe footage of inspiring the children will make it into a campaign ad or two.

The Wall Street Journalreports on rising state and federal unemployment taxes at a time when unemployment remains high. Keynesian economists keep telling us that unemployment benefits have a stimulative “multiplier effect” on the economy. Unfortunately, that sticky little problem of the government having to suck resources out of the economy to pay for this alleged stimulus keeps getting in the way:

The Institute for Research on the Economics of Taxation’s Michael Schuyler has written an interesting paper that compares the federal government’s bleak financial situation to that of the U.S. Postal Service. The entire paper is a good read, but here are a few key points:

An audit released this week by the Department of Justice’s inspector general details wasteful and extravagant spending at DOJ conferences under both the Bush and Obama administrations. Stories about waste in government programs are as common as ants, but this one appears to have struck a nerve across the country—perhaps because the president is trying to convince us that Washington needs more money.

For years, Warren Buffett has been claiming that his secretary pays a higher tax rate than he does. Recently, President Obama has taken that claim and run with it. I don’t know Mr. Buffett’s particular tax situation, but I do know that his claim as a general matter is bogus.

I recently discussed why the additional federal subsidies for state and local government that President Obama is proposing as part of his “job plan” are a bad idea. A new study from two Harvard economists suggests that the president’s affinity for these subsidies might have something to do with the fact that the aid would be particularly helpful to states with more left-leaning legislators and strong public sector unions.